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Common sense dictates that when you're in a hole it's vital you stop digging. Requiring our state to spend beyond its means for the next 24 months to be eligible for all the stimulus monies guarantees that South Carolina will dig itself a $740 million financial hole. Who helps us then? Do we raise taxes, and thereby weaken our competitiveness relative to other states and countries - or do we just summarily end programs for some of the neediest of our state? Or are we to plan on yet another round of stimulus windfall from Washington in two years - again, with money we don't have? I don't know the answer to these questions, but I do know the $740 million budget hole created would be the largest such hole in South Carolina state financial history.
Our grandparents' notion of moderation in all things is especially important when one considers the financing of a state. More than $8 billion of total stimulus effort is projected to come to South Carolina, we proposed taking about 10 percent of this and applying it to paying down state debt. I don't understand how that could be considered unreasonable or the kind of effort that would create disaster. This stimulus is more than our state budget spends in an entire year. If a family won a lottery that sent them a windfall larger than their paycheck for the year, the family that actually set something aside to pay down the mortgage or the credit cards would be viewed as prudent.
Why should it be any different for a state, particularly if as in South Carolina's case we are fourth in the entire nation in the percentage of our budget that goes not to teachers or health care - but debt repayment? Eleven percent of every dollar in yearly revenue goes to paying down debt, and we have $20 billion on top of that in unfunded long-term political commitments. Paying these monies down would give us greater financial latitude in 24 months when the federal gravy train ends to indeed offer more in the way of governmental services. In our case it would pay dividends in the first 24 months alone of $162 million that would be saved in debt service that could go to government service.